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Mainland China import and export falls accelerated in June

Imports dropped 8.4 percent year-on-year in dollar terms in June, Customs said, while exports fell 4.8 percent. The monthly trade surplus jumped to US$48.1 billion.

As the world’s biggest trader in goods, mainland China is crucial to the global economy and its performance affects partners from Australia to Zambia, which have been battered by its slowing growth — while it faces headwinds itself in key developed markets.

Its imports have been shrinking since late 2014 as the country’s once blistering expansion lost steam, slowed down by manufacturing overcapacity, a slowing property market and mounting debt.

June’s decline — the 20th straight month of falls — came after a surprise rebound in May that suggested demand was strengthening.

The fall was greater than analysts expected, with a Bloomberg poll of economists forecasting an import drop of 6.2 percent in dollar terms.

Exports were marginally ahead of an expected 5.0 percent fall.

Customs attributed the lower imports to weakening commodity prices.

“The input volume of major bulk commodities such as iron ore, crude oil and copper maintained growth,” it said in a statement. “The prices of major import commodities remained low with a narrowing price decline.”

China imports and exports both fell in the first half of the year, by 10.2 percent and 7.7 percent respectively.

Customs said there were “obvious obstacles” blocking China’s foreign trade development, particularly the decline in business in both directions with major trading partners such as the US and ASEAN.

Analysts with SG Global Economists said in a report before the results that export strengthening was due to a recovery in the electronics sector, despite lackluster overseas demand.

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